Financial Topics Archives | Page 65 of 808

Oct

2024

How to Wire Transfer Money in 5 Steps

By Janet Siroto | Budgeting & Goals, Financial Independence, money | Comments Off

There are times when you may need to move a large sum of money safely and speedily or get cash to someone in another country. A wire transfer can be a good solution.

Perhaps you won a vintage watch in an auction, or you need to send money to a friend in France who’s arranging a rental car for you. Those are a couple of the situations when a wire transfer could get the job done.

Here, you’ll learn more about this process and find answers to questions like, “How can you wire transfer money?” and “How much do wire transfers cost?” You’ll learn the pros and cons of transferring money this way so you can make an informed decision about the best way to send and receive funds.

Key Points

• A wire transfer is an electronic method for sending funds between bank accounts, allowing for safe and speedy transfers both domestically and internationally.

• The process involves ensuring sufficient funds, selecting a transfer service, filling out necessary forms, covering any fees, and obtaining a receipt for the transaction.

• Wire transfers are often favored for large amounts due to their reliability, as the sender’s funds must be available before the transaction can proceed.

• Fees for wire transfers can range from $0 to $45, depending on the type of transfer, making them potentially more expensive than alternative money transfer methods.

• There are risks associated with wire transfers, including scams and the inability to reverse transactions, which necessitates careful consideration of the recipient’s trustworthiness.

What Is a Wire Transfer?

A wire transfer is an electronic transfer of funds by banks or nonbank money transfer providers like Western Union and MoneyGram.

The term lingers from the era when transferring money — $2.5 million a year by 1877 — occurred via coded pulses of electric current through dedicated wires. (A sender would take money to a telegraph office, and an operator would use codes and passwords to “wire” the money to the telegraph office of the recipient.)

A wire transfer is an electronic transfer of money used around the globe.

These days, wire transfers allow a certain amount of money to be sent electronically from your bank account to a recipient’s bank account, anywhere, or vice versa.

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

How Wire Transfers Work

Banks and transfer service providers wire money for retail customers. They have varying processes and fees, so looking into the choices may save some money. Some details to consider:

• Banks require account numbers in order to process wire transfers; transfer service providers do not.

• Wire transfers can include a person’s name and other contact information or, for a cash-based transfer, be anonymous.

• The banks and transfer providers will have different processing times, so money could be sent within hours if it’s a domestic transaction or a few days if it’s an international transaction.

• Wire transfers are much like cashier’s checks. When someone is receiving money, the bank will treat the payment like cleared money, so as soon as the recipient’s account is credited, they can withdraw or spend the money.

• When someone is sending money, the funds must be in their account before the bank will initiate the transaction. The money will be removed immediately after the wire transfer.

How Long Does it Take to Wire Money?

A wire transfer can be set up in minutes at a bank or wire transfer service. Then, once it’s sent, wire transfers will take up to 24 hours for processing when they are domestic.

International wire transfers can take between one and five days. They usually arrive within two days, but transfers made to or from a “slow-to-pay country” may add to that.

How to Wire Money in 5 Steps

Anyone interested in how to wire funds can follow these step-by-step directions to do it in an efficient and safe manner.

1. Make Sure You Have the Funds

Ensure that the money is in the sender’s account. Wire transfers cannot be sent if the money isn’t there.

2. Pick a Wire Transfer Service

The sender can transfer the money online or go to providers in person and use cash or a bank account, depending on the service. (Some services, like Western Union, may allow you to send money without a bank account.)

3. Fill Out the Forms/Create an Account

When sending money through a bank, senders will need to fill out forms and include their bank account information, their bank’s contact information, and the recipient’s bank account information, including the account number and contact information for the bank. They will also need to provide a government-issued ID and/or their online login information for the bank.

When sending through a wire transfer service, they may have to log in online or go to the service in person and link their bank account or take cash, choose the recipient’s country, delivery method, and account information, and fill out any other information that’s required.

Senders have to be careful that the bank account numbers they provide are accurate, or the money will not get to the recipient.

4. Include Fees in the Amount You Send

Banks and wire transfer services should be able to tell users what the fees are going to be upfront, and users will add those fees to the amount they are sending.

5. Ask for a Receipt

The last step in how to wire money is to get your receipt. This ensures that senders have a record of the transaction. If something goes wrong and no receipt exists, they have nothing to show that they sent the wire transfer correctly.

Pros of Wiring Money

Reasons that people might want to wire money include the following.

They Need to Move a Big Amount

Limits tend to be high, so wire transfers are common for real estate transactions and sending money to and from family members.

The Money Is There

With checks and debit cards, payment can bounce or an account can go into overdraft. With a wire transfer, that’s not possible, since the money must be there in order to be sent. A wire transfer request will be declined if someone has limited funds.

It’s Safer Than Checks

While checks are typically safe, mailing them is not necessarily. People could open mail that isn’t theirs and take checks out and cash them. Wire transfers offer a more secure alternative.

Money Can Be Sent Internationally

Let’s say a person goes to work in another country but wants to send money to family members back home every month. With a wire transfer, that’s easily done.

Recommended: What Are Intermediary Banks?

Cons of Wiring Money

Wire transfers have a few possible drawbacks.

Cost

Expect to pay about $25 for an outgoing bank transfer within the United States, $15 for a domestic incoming payment, and $45 for an international outgoing payment.

Juxtapose that with free or low-fee peer-to-peer payments or using a credit card and paying the balance when it’s due.

No Do-Overs

Wire transfers are typically irrevocable, so both sender and recipient should be sure that all of the required information is correct.

Potential Scams

Scammers may ask unsuspecting people to wire them money for goods or services and then never follow through, so it’s best to avoid wire transfers unless the sender and receiver know each other.

Unlike with a credit card, where someone could dispute the charge, the money may be gone forever once it’s sent.
Here are the pros and cons of wire transfers in chart form:

Pros of Wire Transfers	Cons of Wire Transfers
Can move large sums	Cost
Reliable; the money is there	No do-overs
Safer than checks	Potential for scams
Can move funds internationally

An Alternative to Wiring Money

If you want to move money but don’t want to use a wire transfer, here are some other options.

Peer-to-Peer Services

P2P payments usually can be made from a linked bank account or directly from the P2P account for free. You may already use some of these services, such as PayPal and Venmo.

Some providers do charge 2% or 3% to process payments drawn from a credit or debit card.

Your smartphone becomes a digital wallet for splitting bills and paying personal debts. Payments are sent using another app user’s phone number, email address, or account handle.

Bank Account Money Transfer

You may also set up electronic transfers (you may hear the terms ACH and EFT used) with your bank. Funds can often be sent to any other bank account, not just those held at the same financial institution.

There may not be any account fees or service charges. Check with your bank to be sure.
While all can offer a secure transfer of funds, here’s how they compare on other fronts:

Wire Transfer	P2P Services	Bank Account Transfer
Often involve a fee	May involve a fee, depending on the provider and funding source	Often free
Can take up to 5 days internationally	Can take a few days internationally	Can take up to 5 days internationally

Getting an Online Bank Account With SoFi

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FAQ

What is required to wire money?

To wire money, you will need the amount of cash available, a provider of the transfer (your bank or a service), the proper forms and/or account information filled out, coverage of any fees, and a receipt.

How much does wiring money cost?

The amount you will pay to wire money can depend on the financial institution and whether the money is moving to your account or into someone else’s account, and whether the funds are being sent domestically or internationally. You are likely to find fees from $0 to $45 per transaction.

What is the process of wiring money?

To wire money, you will need to have funds available and fill out paperwork with the recipient’s banking information. Part of the process may involve paying a fee also, and it’s wise to always get a receipt.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBK0323006

Oct

2024

Comparing Cashier’s Checks vs. Money Orders

By Marcy Lovitch | Family Finances, money, Terminology | Comments Off

Cashier’s checks and money orders are two forms of currency used to make payments. While there are similarities between the two, there are also significant differences. Cashier’s checks are drawn on a bank account and guaranteed by the financial institution. A money order, on the other hand, is a prepaid financial tool that can be obtained at banks, the post office, or retail businesses.

Depending on your needs, one payment method may be a better choice than the other. Here, learn what distinguishes a money order from a cashier’s check, the way they work, plus the pros and cons of each.

Key Points

• Cashier’s checks are issued by banks and are backed by the institution, making them a secure option for larger payments.

• Money orders are prepaid financial instruments that can be purchased at various locations, offering more accessibility than cashier’s checks.

• Both payment methods provide guaranteed funds, ensuring that transactions do not bounce due to insufficient funds.

• Cashier’s checks typically have higher fees and no maximum limit, while money orders often have lower fees and a cap of around $1,000.

• The choice between a money order and a cashier’s check depends on factors like payment size, accessibility, and associated fees.

🛈 Currently, SoFi does not provide either money orders or cashier’s checks.

What is a Cashier’s Check?

A cashier’s check, also known as a bank check, is issued by a bank or credit union. You can obtain a cashier’s check by either paying cash upfront or, if you’re a customer of that bank, have the funds drawn from your account.

Because the check is backed by the bank, it’s guaranteed so you don’t have to worry about a bounced check. This is why it’s considered a safe and secure method of payment. Cashier’s checks also clear rather quickly, with some of the funds usually available in one business day.

Cashier’s checks are typically available in smaller and larger amounts, and generally there’s no upper monetary limit. Many people use a cashier’s check for a large purchase or deposit, such as a car, boat, down payment on a home, or a security deposit to a landlord.

How Do Cashier’s Checks Work?

In most cases, you’ll visit your bank in person to do the cashier’s check transaction. Your bank may offer the opportunity to get one through their website, but doing so will take longer since the check will be mailed to you, instead of handed to you.

When you go to the bank, you’ll likely give the bank employee the recipient’s name and the amount of the check. You’ll either purchase the check with cash or have the money debited from a checking or savings account that you have with that particular bank. Cashier’s checks often come with a fee, which usually run about $10 to $20.

Don’t have a bank account? You may be able to get a cashier’s check from a bank where you’re not a customer, but you’ll have to check with the financial institution first. And, if you are able to get a cashier’s check from a bank where you don’t have an account, you’ll have to purchase the cashier’s check with cash.

A credit union may offer you more flexibility if you’re not a customer. Often, credit unions will issue cashier’s checks to members of other credit unions along as their own.

Recommended: Issuing a Stop Payment on a Check

What is a Money Order?

Like a cashier’s check, a money order is a form of paper payment and an acceptable alternative to paying a bill or debt with cash or a check. You can purchase a money order with cash, traveler’s checks, and a credit or debit card. Since a money order is prepaid, unlike a regular check, a money order can’t bounce.

A money order has empty spaces where you’ll need to fill out certain information, similar to writing out a check. Besides the amount being paid and the date the money order is issued, you’ll need to fill out your name and address as well as who is the payee, and then sign your name. In the memo line, you can fill in the reason for payment.

There may be limits on the amount of the money order that’s possible. For example, at a United States post office, a single money order can be no more than $1,000.

You’ll also get a receipt when you purchase a money order which is important to keep safe. With a receipt, you can track your money order and, if the payment is lost or stolen, use it to attempt to recover the funds.

Money orders can be obtained at a number of different places, including post offices, Western Union and similar retail businesses, check-cashing outlets, financial institutions, supermarkets, and convenience stores. Along with paying the face value of the money order, you’ll also have to pay a fee. The amount depends on such specifics as where you obtain the money order, but typically fees don’t exceed $10.

People who want to cash a money order can generally do so at the same places you purchase one. Unless you deposit it into a bank account, be aware that you may be charged a small fee for cashing the money order.

Money Order vs. Cashier’s Check

While both money orders and cashier’s checks are similar in some ways, there are also distinctions between the two. Here’s how the two compare.

Similarities

Both money orders and cashier’s checks are forms of payment that can be used instead of cash or a personal check. Because these are both completely prepaid, a person can cash or deposit a money order and a cashier’s check without worry that either will be declined or returned for insufficient funds.

Money orders and cashier’s checks share the following features:

• Can both be purchased at a bank or credit union.

• Prepaid so funds are guaranteed.

• Provide more privacy for the payer because neither contain a checking account number.

• Each typically comes with fees.

• Allow you to trace or track payments.

Differences

Now, consider the ways in which they differ:

• Cashier’s checks may be available in large sums, while money orders often have limits.

• Money orders can typically be obtained at more locations than cashier’s checks.

• Cashier’s checks are guaranteed by the financial institution that issued them; money orders are paid for with cash. Or you could use a debit card, a credit card, or similar payment method.

• Money orders must usually be purchased in person.

• The fees on money orders may be lower.

Differences Between a Money Order and a Cashier’s Check

Here, how money orders and cashier’s checks compare in chart form.

Money Order	Cashier’s Check
Minimal fees, as low as $1	Higher fees that can equal $10 or more
Generally have a maximum limit amount of $1,000	No limit on amount
Backed by the outlet where you purchased the money order	Backed by the bank
Can be purchased more widely	Can only be purchased at a bank or credit union
Must be bought in person	May be purchased through a bank’s online portal
The ‘pay to’ line is blank so payer must fill in this information or else anyone can cash it	Recipient’s name is filled out by the bank or credit union cashier so the check can only be cashed by the payee
No expiration date	May have an expiration date depending on the bank or local laws

Pros and Cons of Cashier’s Checks

Next, take a closer look at the pluses and minuses of cashier’s checks. First, the pros:

• Available in higher dollar amounts

• Higher security because it’s guaranteed by a bank

• May be purchased through a bank’s website.

Next, the cons:

• Not as widely accessible because you can only obtain at banks or credit unions

• Harder to get at a bank if you’re not a customer

• Higher fees than money orders.

Pros and Cons of Money Orders

Here’s a closer look at money orders and their benefits and downsides. First, the pros:

• Useful for people who don’t have a bank account

• Can be purchased with cash or another type of payment such as a credit or debit card

• Lower fees make it less expensive than a cashier’s check

• More widely and readily available.

And, on the other hand, the cons:

• Typically can only be purchased up to $1,000

• Must get them in person

• May not be able to deposit through mobile banking

• Can be cashed by anyone if you don’t fill out the ‘payment to’ line.

The Takeaway

Both cashier’s checks and money orders are a form of prepaid payment, which makes the funds guaranteed so you don’t have to worry about a bounced check. Whether you use a money order or a cashier’s check as a payment depends on many factors, including the size of the payment you’re making, if you have a bank account, and the outlet you choose to make the purchase. Taking into the account of the pros and cons of each can help you make the decision of which method is right for you.

FAQ

Are a cashier’s check and a money order the same?

No. While both are prepaid forms of payment and therefore guaranteed not to bounce, a cashier’s check can only be obtained at a bank or credit union, while money orders are more widely available at other venues including post offices, check cashing places, and various retailers. Cashier’s checks are better for large purchases or deposits since there’s no monetary limit, while money orders often have a maximum limit of $1,000.

Why would someone use a money order instead of a cashier’s check?

People who choose to use a money order may not have a bank account, could be paying a bill or a debt less than $1,000, or might want to avoid the higher fees associated with a cashier’s check.

How quickly do money orders and cashier’s checks clear?

In most cases, funds from deposited money orders and cashier’s checks can be available the next business day. If the bank suspects there might be fraud involved, however, it could be several weeks.

Photo credit: iStock/Fly View Productions

SOBK0423025

Oct

2024

How to Save Up for a Car

By Jacqueline DeMarco | Budgeting & Goals, money | Comments Off

According to Car & Driver, the average transaction price for a new car tops $48,000 in spring of 2023. And Kelley Blue Book says that the average used car price tops $26,000.

Whichever option you may be pursuing to get yourself some wheels, that’s not an insignificant amount. You likely know that the more money you put down, the lower your monthly payments will be. That’s even more incentive to save up as much as you can for a car.

There are a few simple steps that can jumpstart the process and help you get your funds together for a car. These can include researching your options, then setting a budget for a new vehicle, and putting systems in place so it’s faster and easier to save.

Here’s how to make saving up for a car as quick and easy as possible.

Key Points

• The average price for a new car exceeds $48,000, while used cars average around $26,000, highlighting the need for substantial savings.

• Establishing a budget and calculating a down payment can lead to lower monthly payments and potentially better loan terms from lenders.

• Setting a monthly savings goal helps in accumulating the necessary funds for a down payment, considering potential maintenance costs for an older vehicle.

• Opening a separate high-yield savings account and automating contributions can streamline the saving process for a car purchase.

• Cutting non-essential expenses and exploring additional income sources can significantly boost savings toward buying a car.

Researching Your Options

If your plan is to buy a new car, you can start getting a sense of costs by researching car options that might fit your needs and budget.

Some questions to consider when buying a car include:

• Do you want a compact, sedan, wagon, minivan, truck or SUV?

• Will you use it for work, travel or school?

• What features are important, and which can you live without?

You can read articles, peruse car review sites, visit dealerships in person, and/or review manufacturers’ websites to research car models that appeal to you.

You may also want to look into purchasing a used or preowned vehicle, and seeing exactly how much this could save you. You can get a sense of costs by reviewing the used car market for the makes and models you are considering.

Calculating Your Down Payment

Once you have a rough idea of how much it will cost to get the car you want, you can start figuring out how much you may need for a downpayment.

Parting with a solid chunk of cash is never fun, but an appropriate down payment can help to make your car repayment process more manageable.

A 20% down payment is often recommended when purchasing a new car, and a downpayment of 10 percent is a general guideline for a used car.

But this is not a set rule.

A higher down payment can lead to lower monthly car payments. For one reason there’s less money to finance. For another, a lender might extend better terms, such as a lower interest rate, when you make a substantial downpayment.

Your down payment can include cash, the trade-in value of the vehicle you drive now, or a mix of the two.

Recommended: 12 Mobile Banking Features

Calculating Your Monthly Payments

If you believe you can save up enough to buy the car outright, way to go! That means you will ultimately pay less for the car because you’ll avoid paying any interest.

But if, like many people, you plan to get an auto loan, you may next want to determine how much your monthly car payments will be.

You can sit down and crunch the numbers, or you can let an online car loan calculator do the work. These calculators are designed to help you estimate what your monthly car loan payments will be throughout the life of your auto loan.

Steps to Saving up for a Car

Once you have a general idea of how much you need to save up for a downpayment, and how much money you’ll need to budget each month after you purchase your vehicle, you can set the saving money process in motion.

Here are some smart steps to help you get to the finish line.

Figuring Out How Much to Save Each Month for a Car

You can come up with a monthly savings goal by taking the amount you’ve determined you’ll need for a car upfront (subtracting any money that may come from selling or trading in your current car), and then dividing it by however many months you have left until your ideal purchase date.

The number you get after doing this equation is how much money you ideally want to save each month to meet your goal. You might also think about saving more than that per month so you can prepare for your monthly payments.

And if you’re currently driving an older vehicle that is prone to issues, you may want to save a little extra as a cushion for any necessary maintenance or repair costs.

Remember, saving for a car isn’t an overnight process and it may take longer than you initially expected, and that’s okay–the key is to get started.

Finding the Right Savings Account to Save Up for a Car

If you haven’t set up a savings account yet, this may be a good time to do so.

Good options for a short-term saving goal like buying for a car include: a high-yield savings account, money market account, online savings account, or a checking and savings account.

These options can offer a higher interest rate than a standard bank account, yet allow you to access your money when you’re ready to buy your car.

Having a savings account that is separate from your spending account can help you keep track of your progress, and allow you to know exactly how much money you have for a down payment for your car.

Making Saving for a Car Automatic

Once you have a good place to start and build your car savings, consider setting up automatic contributions to this account. You may hear this referred to as automating your savings.

You can time these transfers to happen on the same day each month, maybe right after you get your paycheck.

This makes sure the savings happens (since you won’t have to remember to transfer the money), and also ensures that you don’t accidentally spend the money you want to put aside each month to save up for your car.

Cutting Back on Extras

If your current budget doesn’t give you much room to save for a car, you may want to see if you can pair back some of your monthly expenses.

For instance, if you’re paying a high price for cable each month, but primarily watch streaming services, you may be able to cut that line item right out of your budget for a significant savings.

Or, if you seldom use your gym membership, you might want to pause or cancel it and jog around the neighborhood and/or stream workout videos at home for free instead.

Or, you might be able to save money on food by cooking more and eating out/getting takeout less often. You might also decide to only use your credit card for essentials for the next few months.

Any changes you make don’t necessarily have to be permanent. You may decide that you can go back to certain spending habits once you have a sufficient down payment to buy a car.

Finding a Extra Stream of Income

If your current income is only enough to cover your current bills, you may want to look into taking on a low-cost side hustle to help you save up for a car.

You might be able to get some extra work delivering people’s groceries, mowing lawns, babysitting, cleaning houses, driving for a ride-share service, selling homemade goods online, or working as a virtual assistant.

Or you might be able to turn one of your talents into some freelance work, such as designing websites or managing social media for a local business.

Earning a little extra cash can go a long way, giving you the chance to put more toward a car, borrow less money, and lower your monthly payment.

Trading in or Selling Your Old Car

Trading in your old car to help fund your next car purchase, and is often a good option to lower the overall amount you’ll owe on your new vehicle.

To get the most money, it’s a good idea to compare what different dealers will offer you for the car.

You can also research what your car may be worth on sites like Edmunds and Kelley Blue Book to see if your trade-in offer seems reasonable.

You may also want to look into selling the car yourself to a private party since it could yield a higher price than trading in. The tradeoff is that this typically requires a little more work.

Recommended: How to Switch Banks

Getting the Best Deal on a Car

When you’re ready to start seriously shopping for a car, you’ll want to take advantage of any deals you can find, such as rebates and special dealership offers.

You can receive quotes from multiple dealerships; it’s a good idea to ask them if the price quoted includes deducted rebates. This process may feel tedious, but it can help you learn which make and model you can afford.

If you’ll be financing the car, you may also want to shop around for auto loans. You can check with various lenders, including banks and credit unions, to see who might offer the best lending terms.

With that information in hand, you can ask the car dealership whether it can offer a better financing deal.

If you do decide to go the used car route, it’s a good idea to follow the steps recommended by consumer.gov, such as finding out if the car has any recalls, researching if the warranty is still in effect, and having a mechanic inspect the vehicle before making a purchase, for your financial (and physical) protection.

The Takeaway

A car is a major purchase, and it’s a good idea to save up as much as you can before you take the plunge.

For one reason, you may be able to buy the car outright, and avoid taking a loan (and paying interest). For another, the higher your down payment, the lower your monthly car payments may be once you purchase the car.

Learning how to save money for a car can take a little trial and error. You may need to rejigger some of your expenses and find ways to cut back and/or bring some extra money, at least temporarily.

Ready to start saving up for that car? You may want to consider signing up for a SoFi Checking and Savings account.

With SoFi Checking and Savings’s Vaults feature, you can separate your spending from your savings (even create a Vault specifically for car savings) while still earning competitive interest on all your money.

Plus, you’ll earn a competitive annual percentage yield (APY), and there are no account fees.

Sign up for SoFi Checking and Savings, and start saving up for that car today!

SOBK0523047U

Oct

2024

A Complete Guide to Ordering Checks

By Anna Davies | Budgeting & Goals, Financial Independence, money | Comments Off

Checks may not be used as often as they were in the past, but they are still a useful financial tool for most people to have.

Perhaps you want to buy something at a flea market from a vendor who doesn’t take plastic. Or you like to write checks as a way of keeping track of your spending since it may provide a better record than electronic transactions. Or maybe you need that voided check as a way to set up direct deposit with your employer.

Often, you’ll receive some complimentary checks when opening a checking account. However, sooner or later, you are likely to run out and need some additional checks.

When that happens, how do you order a new checkbook? Should you order through your bank? Or is there a faster, cheaper option elsewhere?

You’ll learn the answer to those questions and more in this guide to ordering checks for less.

Key Points

• Checks remain a useful financial tool for various transactions, including making payments and setting up direct deposits, despite declining usage in the digital age.

• Different types of checks exist, including personal, business, cashier’s, and certified checks, each serving specific purposes in financial transactions.

• Ordering checks through banks can be costly, with prices typically around $20 for a box of 100, but numerous online vendors offer more affordable options.

• When ordering checks online, it is essential to ensure the vendor’s security measures are in place, and to provide the necessary personal and banking information.

• Having checks on hand is beneficial for those who may face situations requiring paper payments, despite the increasing prevalence of digital transactions.

What Are the Different Types of Checks?

There isn’t just one kind of check in the world. Get acquainted with these four common options that can play a role in managing your money.

Personal Checks

When people wonder about how to order checks, they are typically referring to personal checks. These are the rectangular documents you usually get when you open a bank account. They allow you to transfer funds from your account to a payee, whether that’s your cousin, your WiFi provider, or your dentist.

When you first open an account, you may get a small number of what are called counter checks, which may not be fully personalized with, say, your name and address.

Then, your fully printed checks are likely to arrive, complete with your name, address, account number, and bank routing number. They are also useful when making payments and setting up direct deposit. A voided check can be used by your employer to route your paycheck to the correct account.

Business Checks

What’s the difference between a business check vs. a personal check? Business checks are similar to personal checks, but are drawn from a business checking account instead of a personal one. If you run your own business, you might use these checks to, say, pay for your office rent or send funds to suppliers.

Cashier’s Checks

Sometimes also called a bank check or official check, this is a secure payment used to make significant purchases.

A cashier’s check requires a teller to withdraw funds from your personal account and then cut a check from the bank to pay the recipient on your behalf.

With these checks, the bank is guaranteeing payment, so there is no chance the check will bounce. There is typically a fee for getting a cashier’s check, often around $10 or $15.

Certified Check

A certified check is a type of personal check that the bank guarantees. When you write the check, the bank verifies you have enough money in your checking account to cover the amount and may place a hold on that money until the check clears.

The bank will typically then stamp or print “certified” on the check. Fees vary depending on which bank you use and the size of the check, but are often in the $15 to $20 range.

Recommended: What Is an Electronic Check (E-Check)?

Reasons Why Checks Are Used Today

In a tap and app world, checks may seem like a byproduct of a past era. Some transactions, however, still require a check. It’s not uncommon, for instance, for some landlords to require a check for a security deposit or for some smaller businesses to prefer cash or check payment.

Here are some of the reasons why checkbooks can still be useful and even a preferred payment form:

• Checks can protect your money. A transfer can be misdirected with a typo, and cash can get lost or stolen. A check made out to the recipient is challenging to cash if it gets into the wrong hands.

• If a check is lost, you can stop payment on the check and reissue a new one.

• A check provides a paper record of payments made.

• Checks can also be a way to verify identity. A voided check (a check you pull from your checkbook and write VOID so no one can cash it) can be necessary to set up autopay or direct deposit, or as a way to verify your address for certain services. (While you can use a check with an old address, it may cause confusion and can be wise to order a checkbook of new, updated ones.)

Of course, checks have their drawbacks too.

• There can be a significant delay between the day you write a check and the day it gets processed, which could cause you to accidentally overdraw your account if you don’t keep careful records.

• Checks can sometimes get lost in transit or stolen. Since a check is good for six months, it can be a good idea to cancel any checks that don’t get to the intended recipient in a timely fashion.

• Checks can also come with fees (such as when cashing a check) and other costs (like having to buy checks).

Fortunately, there are ways to cash a check without a fee. And, if you look beyond your bank when it comes to re-ordering checks, you can often pay significantly less.

Where Can I Order Checks?

Many people will order checks through their bank simply because it’s convenient. These often cost about $20 per box of one hundred, though they may be less or even free if you are a premium account holder.

However, you don’t have to buy your checks at your bank. There are numerous online vendors, such as Checks In The Mail and Carousel Checks, as well as big box retailers (such as Costco and Walmart) that offer customized personal checks that include the same security features as bank checks.

Prices can range from five cents to twenty-plus cents per check, and minimum orders might be anywhere from 25 checks to almost 500.

But how do you order checks from the best vendor? Because you need to input sensitive information, such as your bank account number and the routing information for your bank, it can be a good idea to make sure you choose a vendor that takes security measures seriously and also that the checks you buy are secure.

Some actions that can help maximize security:

• Making sure the site where you buy checks is secure. A lock image in the address bar of your browser indicates a secure connection and that any information transmitted, such as your bank account info, will be done in a secure manner.

• Choosing a reputable seller. It can be a good idea to vet any company you are considering buying checks from by taking a look at their Better Business Bureau ratings and reviews.

• Considering security features. Some check printing companies offer enhanced security features, including watermarks, hard-to-copy microprint, hologram foil, and thermochromic ink (ink that disappears with heat). These features can add to the cost of your checks, but they can make your check payments even more secure.

What You Need for Ordering Checks Online

When you’re wondering “How do I order checks online?” it can be wise to have some key information ready to complete your transaction. This typically includes:

• Your personal information. This is your name (or the name of your company for business checks) and address.

• Bank information. This includes the name and address of your bank, which you can find on your existing checks.

• Your checking account number. You can find this at the bottom of your existing checks or on your bank statement. Of the three listed numbers along the bottom of your check, your account number will be the second number from the left.

• Your bank routing number. Also known as an ABA number, this number serves as an address so the banking system knows which bank will pay the check. You’ll want to look for the nine-digit number on the bottom left of your checks.

• Check number. To keep your finances organized, it’s a good idea to have your new checks start with the next number in your checkbook series. For instance, if the last check in your last checkbook is 199, consider starting the new set with check number 200.

When ordering checks, you may want to keep in mind that, depending on the company, production time may take a few weeks. That’s why It can be a good idea to order checks well before you may need them.

Recommended: What Is a Voucher Check?

Protecting Your Money With SoFi

If you’re like many Americans, you probably don’t use checks often these days. But checks are still with us, and it can be a good idea to always have checks on hand for those times when you need or want to pay by check.

Buying checks from the bank can be pricey though. Fortunately, it’s fine to search the web for cheaper options, provided you take some security precautions.

Prefer to get all of your checks for free? SoFi Checking and Savings offers paper checks at no cost when you open an online bank account. Plus, SoFi helps you bank better in other ways: You’ll earn a competitive annual percentage yield (APY) and pay no account fees, which can mean your money grows faster. And you’ll spend and save in one convenient place, which may simplify your financial life.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

Can you print checks by yourself?

It is possible and legal to print checks at home. However, you will need the tools to do so, including a printer, software to format the checks properly, special paper (known as check stock paper) with security features, a magnetic ink character-recognition font (for the numbers at the bottom of the checks in a way that can be read electronically), and magnetic ink.

How much does it cost to order checkbooks?

When you order additional checkbooks from a bank, a box of 100 may cost $20 or more. Some banks and premium accounts will lower or even eliminate that fee. When you order from check companies or mass merchants, the per-check price can range from a few cents to more than 20 cents per check, with orders ranging from 25 to 480 or more checks.

Do I have to order checks through my bank?

You do not have to order checks through your bank. If you want to, you may order from online check companies or merchants like Costco and Walmart.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBK1222031

Oct

2024

How Much Money Should You Keep in a Checking Account?

By Janet Siroto | Budgeting & Goals, Family Finances, money, Money & Life | Comments Off

It can be a good move to keep one to two months’ worth of living expenses in your checking account, plus a buffer of about 30% of that amount.

For some people, that will be a stretch. For others, the preference may be to stash more there. While you may like to see a robust balance in your checking account, you want to have “just enough” on deposit (or enough to meet a minimum balance requirement).

Here’s why: A checking account likely pays very low or no interest, so additional funds are better stowed elsewhere, so your money can grow. Read on to learn more about this topic and how to determine the right amount to keep in your checking account.

Key Points

• Maintaining one to two months’ worth of living expenses in a checking account, along with a 30% buffer, is generally advisable for financial stability.

• Monthly income and expenses should be assessed to determine the appropriate balance for a checking account, ensuring enough funds to avoid overdrafts.

• Major upcoming expenses and savings goals should influence the decision on how much money to keep in a checking account, encouraging transfers to higher-interest savings.

• Checking accounts typically offer low or no interest, making it beneficial to keep only necessary funds there while saving excess money in accounts that yield higher returns.

• Tracking spending closely and automating savings transfers can help maintain an optimal checking account balance, allowing funds to grow in savings accounts instead.

What Is a Checking Account?

First things first: A checking account is a type of deposit account that is held at a traditional bank, online bank, or a credit union. It provides a secure spot for your funds (thanks to FDIC or NCUA insurance) and can be the foundation of your daily financial life.

For instance, your paycheck can land there by direct deposit; you can withdraw funds from your account by using an ATM, making a transfer, and more. And you will likely have a debit card that’s linked to the account which allows you to easily spend as you stock up at the supermarket or grab a cold brew.

A few other details to note:

• Checking accounts typically allow you unlimited transactions, but they probably earn no or very low interest. The average checking account currently earns 0.08% in interest, according to the Fed. It can be wise to consider high-yield checking accounts or premium accounts to see if you can snag a higher return.

• Some checking accounts are available fee-free, but they may have minimum deposit requirements and some surcharges. It’s wise to read the fine print on an account you currently have or are contemplating opening to know the full story.

If you’re curious how much others keep in their checking accounts, the Federal Reserve’s recent Survey of Consumer Finances (based on 2022 data) found that Americans keep a median balance of $8,000 in their transaction accounts, which include checking and savings accounts, among others. The average amount in checking and other transaction accounts is $62,410, but that number’s pulled up by those with higher net worth.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

Factors to Consider

When deciding how much money you should have in a checking account, there’s no one-size-fits-all number. Instead, consider these factors:

Monthly Expenses and Income

To determine how much cash to keep in your checking account, you’ll first want to tally your monthly income and expenses — those two numbers are vital. For example, if you net $8,000 a month in pay and your usual expenses (housing, utilities, food, healthcare, “fun” spending, etc.) are $7,000 a month, you might want to aim for a balance of $10,000 to $15,000 in the account at any time.

This would give you one to two times your monthly expenses, plus a little overage. That overage is important, as it’s your buffer in case your spending were to increase one month (say, a mega dental bill). You don’t want to wind up in overdraft.

If you need help tallying or tweaking your monthly expenses vs. income, there are a variety of budgeting methods that can help you out.

Upcoming Large Expenses

When deciding how much to keep in your checking account, you may want to account for any major expenses coming your way. Perhaps you pay your homeowners insurance annually or your partner’s big birthday is coming right up. You’ll want enough money accessible to cover those.

Savings Goals

On the other hand, you don’t want to let too much cash just sit in your account when it could be working harder for you. You can transfer any excess funds into a savings account where you will likely find much higher interest rates.

For instance, the average savings account has 0.57% interest as of May 2024, which is an improvement over checking’s 0.08%. Also, online-only banks may offer rates in the range of 4.5% for their savings accounts. Higher interest (and more frequent compounding) can help plump up your savings for a summer vacation, new car, or down payment on a house.

In addition, you may want to prioritize stockpiling some money in an emergency fund, which financial experts say should have at least six months’ worth of living expenses in it.

Account Fees and Requirements

As you compare checking accounts, be sure to drill down on account fees and requirements. Fees can nibble away at your money, and there are quite a number that can be assessed. There are account maintenance fees, overdraft fees (at about $35 a pop), out-of-network ATM fees, and more. Read the fine print (or look at your statement if you already have an account) to see where you stand. Then you can make a choice that helps you avoid bank fees.

Also note that there may be requirements for your account, such as keeping a certain amount on deposit or using your debit card a certain amount per month. If you don’t meet the guidelines, you could wind up paying more fees as well.

The Basic Living Expenses Approach

As mentioned above, one popular approach for how much money you should keep in a checking account is to have one to two months’ worth of living expenses on deposit.

Need help calculating that number? Tracking your expenses can be done fairly simply by reviewing a couple of months of your current checking account statements and totaling how much flowed out. Some accounts have a dashboard that make it extra easy to see your spending.

Or you could add up your typical expenses the old-school way, using an online spreadsheet or pencil and paper. You will want to include such costs as housing, transportation, food, utilities, clothing, healthcare, loan payments, credit card payments, dining out, entertainment, streaming services, insurance, and the like.

If your usual expenses were, say, $6,000 a month, you might want to keep somewhere between $8,000 and $14,000 in your checking account.

Earning Interest vs. Liquidity

Another way to look at how much money you should keep in your checking account is to balance two financial forces: earning interest and liquidity.

Typically, in order to pay out higher interest, a financial institution needs to feel confident that money will be accessible for them to use for other business purposes. That is why savings accounts, which used to allow only a limited number of transactions per month (incidentally, some banks still enforce this guideline), will pay a higher interest rate.

Similarly, a certificate of deposit (CD) will likely pay more than a checking account, because the customer agrees to keep their funds in the account for a specific period of time.

The other side of the coin is liquidity, meaning that you can access money on demand, without fees or penalties. This is what a checking account excels at. You may not earn much (or any) interest, but you know you can withdraw funds and pay bills from it as often as you like.

For this reason, you probably want to keep just enough cash in checking to pay bills without overdrafting, while moving any additional funds into savings (perhaps earmarked as an emergency fund) to reap a higher interest rate.

Recommended: Checking Account Pros and Cons

Tips for Right-Sizing Your Balance

As you fine-tune the amount of money you keep in your checking account, try these tactics:

Track Spending Closely

You may think you know how much your monthly expenses are, but tracking the exact amount can be a very helpful exercise as you think about your bank account balances. For instance, you may not be accounting for such spending as gifts for friends and family, subscriptions, prescription medications that refill every three months, contact lenses, and charitable donations.

Some banks provide tools to help you track your spending, or there are apps and websites that can give you a fuller picture. As you comb through your spending, you may also find places where you can easily trim some money.

Automate Savings Transfers

One way to make sure you are building your savings is to set up automatic transfers from your checking account to savings. This can be a seamless, no-effort way to make sure money doesn’t just sit in checking.

You might automate your money by having recurring transfers from checking to savings right after you are paid. That can help you avoid spending when you see money piling up in checking, and it moves money to where it can earn interest.

Take Advantage of Personal Finance Apps

As noted above, there are personal finance apps that can help you manage your money. First check your current bank; they may offer helpful tools. There are also paid apps (like YNAB and PocketGuard) available for budgeting, typically for $8 to $15 a month.

Or you might want to take advantage of round-up apps that can help build your savings as you spend. These round up the price of purchases to the next dollar and send the difference into your savings account (or investments) so it can help build your wealth, bit by bit.

The Takeaway

Keeping slightly more than one to two months’ worth of living expenses in your checking account can be a good rule of thumb. Any additional funds can work harder for you when transferred to a savings account, where they can earn interest and help your money grow.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

Is too much in checking a bad idea?

While not exactly a bad idea, keeping too much money in your checking account can mean you are missing out on the opportunity to earn interest and help your money grow.

What is the average checking account balance?

The average transaction account balance (which includes checking and savings accounts) is over $62,000, but that skews high due to those who are wealthier. The median figure is $8,000.

What does it mean for money to be liquid?

When money is liquid, that means it can be accessed on demand. For example, cash in the bank is liquid; the equity you have in real estate is not, since it would require effort to secure funds related to that investment.

Photo credit: iStock/JLco – Julia Amaral

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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How to Wire Transfer Money in 5 Steps

What Is a Wire Transfer?

How Wire Transfers Work

Get up to $300 when you bank with SoFi.

How Long Does it Take to Wire Money?

How to Wire Money in 5 Steps

1. Make Sure You Have the Funds

2. Pick a Wire Transfer Service

3. Fill Out the Forms/Create an Account

4. Include Fees in the Amount You Send

5. Ask for a Receipt

Pros of Wiring Money

They Need to Move a Big Amount

The Money Is There

It’s Safer Than Checks

Money Can Be Sent Internationally

Cons of Wiring Money

Cost

No Do-Overs

Potential Scams

An Alternative to Wiring Money

Peer-to-Peer Services

Bank Account Money Transfer

Getting an Online Bank Account With SoFi

FAQ

What is required to wire money?

How much does wiring money cost?

What is the process of wiring money?

Comparing Cashier’s Checks vs. Money Orders

What is a Cashier’s Check?

How Do Cashier’s Checks Work?

What is a Money Order?

Money Order vs. Cashier’s Check

Similarities

Differences

Differences Between a Money Order and a Cashier’s Check

Pros and Cons of Cashier’s Checks

Pros and Cons of Money Orders

The Takeaway

FAQ

Are a cashier’s check and a money order the same?

Why would someone use a money order instead of a cashier’s check?

How quickly do money orders and cashier’s checks clear?

How to Save Up for a Car

Researching Your Options

Get up to $300 when you bank with SoFi.

Calculating Your Down Payment

Calculating Your Monthly Payments

Steps to Saving up for a Car

Figuring Out How Much to Save Each Month for a Car

Finding the Right Savings Account to Save Up for a Car

Making Saving for a Car Automatic

Cutting Back on Extras

Finding a Extra Stream of Income

Trading in or Selling Your Old Car

Getting the Best Deal on a Car

The Takeaway

A Complete Guide to Ordering Checks

What Are the Different Types of Checks?

Personal Checks

Business Checks

Cashier’s Checks

Certified Check

Reasons Why Checks Are Used Today

Where Can I Order Checks?

Get up to $300 when you bank with SoFi.

What You Need for Ordering Checks Online

Protecting Your Money With SoFi

FAQ

Can you print checks by yourself?

How much does it cost to order checkbooks?

Do I have to order checks through my bank?

How Much Money Should You Keep in a Checking Account?

What Is a Checking Account?

Get up to $300 when you bank with SoFi.

Factors to Consider

Monthly Expenses and Income

Upcoming Large Expenses

Savings Goals

Account Fees and Requirements

Student Loan
Refinancing

Personal
Loans

Online
Investments